Altura announced on October 31 that it had despatched two cargoes each of around 5,000 tonnes of lithium spodumene to China, on October 9 and October 20. The material came from the company’s Pilgangoora lithium mining operation.

The first shipment went to Altura’s offtake partner, Lionergy in China, but both shipments had a minimum average purity of 6% lithium oxide (Li2O).

The Australian miner did not specify the price at which the lithium spodumene was sold, but the bidding offtake agreement with Lionergy and J&R Optimum Energy established a floor and ceiling price for the first three years of an offtake agreement starting this year.

Altura intends to supply a minimum of 100,000 tonnes per year of lithium spodumene, min 6% Li2O, once production is fully ramped up, to each of its offtake partners, at a minimum floor price of $550 per tonne and a ceiling price of $950 per tonne.

The company did not specify when it planned to reach full production for stage 1 of this process.

The movements in lithium carbonate prices in China have made this type of offtake agreement - with a floor and ceiling price - more common because it safeguards both producer and consumer from the sort of price volatility that has been seen in China since late 2015.

The spot price for battery-grade lithium carbonate in China more than tripled to a monthly average of $26.60 per kg in April 2016, up from $7.70 per kg in June 2015.

Most recently, the spot price for battery-grade lithium carbonate, min 99.5% Li2CO3, ex-works China, dropped by 50% to 74,000-83,000 yuan ($10,724-12,029) per tonne on November 1, 2018. This was down from 158,000-160,000 yuan per tonne on January 4.

Because most of the lithium spodumene in China is converted into lithium carbonate, the direct effect of the lower price for battery-grade lithium carbonate has been to bring down the spodumene price in China.